Chancellor reveals Budget plan for 300,000 homes a year

Chancellor Philip Hammond has announced plans to ensure 300,000 homes are built to alleviate the UK’s housing crisis.

In a series of interviews ahead of the Budget on Wednesday (22 November), the chancellor said he would do “whatever it takes” to meet the new target and is reportedly planning £5bn of investment in housebuilding.

He said the government would provide infrastructure to help get developments underway, clean up industrial sites for new developments and ensure banks are prepared to lend to smaller housebuilders.

Mr Hammond said: “I’m clear that we need to get to 300,000 units a year if we are going to start to tackle the affordability problem, with the additions coming in areas of high demand.”

The chancellor also pledged a review of land-banking – an alleged practice in which developers hoard land to drive up its value rather than building homes immediately – and councils that are blocking development.

While the amount of new homes being built has increased in recent years, the number provided in England last year – just over 217,000, of which more than 183,000 were new build – remains below the level needed to tackle the affordability gap.

Despite flagship schemes such as Help to Buy aimed at helping people get on the housing ladder, saving for a deposit has become a major challenge for first-time buyers.

According to Halifax, the average first-time buyer deposit was nearly £33,000 in the first half of 2017, rising to £106,577 in London.

The Conservatives have faced growing pressure to tackle the housing crisis following the recent success of Jeremy Corbyn, who helped Labour make significant gains in the June General Election by appealing to younger voters feeling shut out of prosperity.

Daniel Bailey, principal at Derbyshire-based Middleton Finance, said he was not optimistic that the government would meet the 300,000 homes target, adding that they had underdelivered for so long that it was only the minimum amount of new properties that would be required.

He said: “I would like to say they will meet the target, but successive governments over the last few decades have failed to build enough of the houses we require.

“It is not just the number, it is the type of houses. We need more shared ownership and more social housing, which I fear they won’t build. It will just be standard new builds people who have good jobs and can afford the properties.

“Politicians have talked a great game, but when it comes to delivering they have failed over a great period of time now. Delivering is another matter.”